What Arts Orgs Need Now: #1 The Surprising Silver Lining in Federal Funding Cuts for the Arts

This week’s series of posts are based on a conversation I had with Dave Wakeman on his podcast The Business of Fun, which came out on July 8, 2025. In each one, I’m digging deeper into one idea we talked about — with a few extra thoughts and takeaways for arts leaders.

The Trump administration’s decision to slash support for the National Endowment for the Arts, the National Endowment for the Humanities, and the Institute of Museum and Library Services—with no real process or notice—is devastating. Especially for small museums and historic sites that rely on those project-based grants to survive.

But as painful as this moment is, there’s a critical truth hiding in plain sight:

It could be worse. Much worse.

First, imagine if U.S. arts funding worked like it does in parts of Europe, Asia, or Russia—where central governments can shut down organizations or dictate the kind of art they produce. Since the NEA and NEH were founded in 1965, advocates have pushed for higher federal funding. But ironically, the relatively low funding levels and peer-reviewed grant panels have protected American cultural production from political control. The government doesn’t get to decide what art gets made.

Second, most federal arts funding is project-based—not operating support. That matters. Grants are awarded case-by-case, for specific initiatives—not for keeping the lights on. Imagine if federal dollars made up 30% or 40% of an organization’s total budget and were suddenly cut. We wouldn’t just see canceled projects. We’d see closed doors.

Our decentralized funding model—where federal, state, and local governments each contribute some support—isn’t perfect. But in moments like this, it’s a strength. No single source holds all the power. Organizations still have options. They can still pivot.

And that’s what I’m urging arts organizations to do right now: focus on what you can control. Build resilience through earned income and individual giving.

Start by understanding why your current audiences and donors are showing up. Not just their demographics—their emotional, social, and personal reasons for caring. Don’t guess. Ask. Run a survey. Host a listening session. Then use what you learn to reach more people like them.

This isn’t just a funding crisis. It’s a strategic inflection point. It’s time to start controlling our own destinies.

🎧 Listen to the full conversation